Accordingly, the budget does not have to bear 100% of the capital, with an expected payback period of just 30 years instead of over 140 years. The construction time is reduced from 10 years to 5 years, thereby boosting economic growth and enhancing the quality of life and convenience for citizens.
Public Investment and PPP: Budget Risks Losing Billions of USD
– The North-South High-Speed Railway is a strategic infrastructure project, yet its investment model remains undecided. Many argue that the project’s scale is too large, and only public investment can sustain it. What is your perspective?
Economist Vũ Đình Ánh: That argument is flawed. If funded through public investment, the budget must cover 100% of the capital, and this investment is unlikely to yield a profit, as the project is almost certainly unprofitable. Current calculations suggest a payback period of up to 140 years, or it may never break even due to additional operating and maintenance costs, which could add tens of billions of USD in the coming years.
This is a lesson learned from many countries worldwide. It places significant pressure on public debt and national credit ratings.
“For the North-South High-Speed Railway, direct private investment is the optimal choice compared to public investment or public-private partnerships (PPP),” emphasizes Vũ Đình Ánh.
– Can we infer that public investment would lead to numerous inefficiencies?
Absolutely. Beyond the issues mentioned, the effectiveness of public investment remains a concern. Although we have made significant improvements, long-standing weaknesses persist, such as complex procedures, slow disbursement, cost overruns, and project delays.
For a nationally strategic and high-tech project like the high-speed railway, these inefficiencies could significantly inflate the total investment, extend timelines, and cause economic opportunities to be missed.
 Demo design of the high-speed railway. |
– Is PPP a more balanced solution, where the government and partners share responsibilities?
PPP may seem balanced, but in practice, it often involves conflicts of interest between parties, and Vietnam currently lacks adequate mechanisms to resolve these conflicts.
Specifically, for the North-South High-Speed Railway, the issue is even more significant. According to regulations, private investors must mobilize a minimum of 30% of the capital. Given the total investment of over 60 billion USD, this 30% is an enormous amount, beyond the capacity of any single enterprise.
In reality, PPP is suitable for projects with strong commercial cash flows, such as BOT highways, seaports, and airports, where investors can recover their capital. However, high-speed railways are different. Private investors must mobilize vast amounts of capital, but ticket revenues will not cover costs, while maintenance over the project’s lifespan can add tens of billions of USD.
No enterprise would risk tens of billions of USD to be merely a “partner.” To attract investors, the government might have to guarantee profits, which would revert to the state bearing the risks.
“Direct Investment Offers Tangible Benefits for the Economy”
– What distinguishes the direct investment model?
This is the only model I find suitable for Vietnam’s reality. According to proposals from some enterprises registering for direct investment, the government would lend 80% of the capital, with private investors contributing 20%.
Critically, the government would fully recover the 80% capital after 30 years, with no loss. In contrast, with public investment, the budget not only covers 100% of the capital but also lacks any basis for recovering the investment.
– However, some argue that this model shifts all risks to the government. What is your take?
The reality is the opposite. When private entities directly execute and operate the project, they are motivated to work quickly, optimize costs, and innovate technology for long-term efficiency, while timelines are shortened. The government retains oversight and approval roles without bearing the costs of overruns, delays, or prolonged operational risks, as seen in public investment. This is evident in recent record-breaking projects like the new National Exhibition Center.
I have similar confidence in the North-South High-Speed Railway. For instance, VinSpeed has committed to completing the project in 5 years instead of 10, reducing the payback period from 140 years to 30 years, as initially calculated by authorities.
The high-speed railway is not just a transportation project but a foundational infrastructure that could reshape Vietnam’s economic structure for decades. Choosing this model allows us to develop a high-speed rail industry without direct investment. The sooner it is completed, the greater the socio-economic benefits.
– There are concerns that offering 0% interest loans for 30 years is overly favorable to businesses. How do you address these concerns?
Interest-free loans are the minimum condition for the project’s financial viability. Businesses must already self-fund tens of billions of USD for equipment over 30 years, and adding interest would make it unsustainable. The alternative is either the government undertakes the project at immense cost and prolonged timelines, or the project remains on paper.
– In summary, what is your overall view on the investment model for this project?
If Vietnam aims to seize growth opportunities, narrow development gaps, and advance industrialization, direct investment with robust private sector involvement and government capital facilitation is the most viable path to execute the project and deliver tangible economic benefits.
– Thank you, Mr. Ánh!
Tâm An
– 20:38 24/11/2025
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